This Week in Health Reform—Federal Legislative Overview

Senate
Former President Bill Clinton visited Senate Democrats on Capitol Hill this week, urging them to quickly pass health care reform by the end of the year. Senate Leadership continues to work pulling its final merged bill together and Majority Leader Harry Reid (D-NV) says that he will introduce the legislation on the Senate floor the week of November 16th.

Under Senate rules, a 60-vote majority is required to move the bill forward before official debate can begin. It is likely that Democrats will receive the 60-votes needed to move the bill to the Senate floor, but it remains to be seen whether Reid has the full 60 votes to overcome a filibuster for bill’s official passage. Reid is still aiming to pass the legislation by the Christmas holiday.

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House
After passing its health care reform legislation, the “Affordable Health Care for America Act” (H.R. 3962), the House of Representatives was quiet this week.

Overview: Medicare Payroll in Senate Health Care Reform Legislation

The Senate’s health care reform legislation has still not yet been unveiled, but there are reports that an analysis from the Congressional Budget Office has found the bill to be more costly than expected, so Senate Democrats are already considering new ways to pay for the bill.

One of the options is an increase to the Medicare portion of the payroll tax on individuals making $250,000 per year or more. Currently, workers and employers each pay a 1.45 percent payroll tax for Medicare and the new proposal would increase that to 2.5 percent payroll tax bracket for those making $250,000 per year or more.

By including this new approach, it would allow the Senate to either reduce or eliminate altogether the controversial excise tax on “Cadillac” or high-cost insurance plans, passed in the Senate Finance Committee’s bill last month. Under legislation (S 1796) approved by the Senate Finance Committee, individual insurance plans costing more than $8,000 and family plans costing more than $21,000 would face a 40 percent excise tax on any amount above that level.